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USD/JPY drops on flight to safety

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 15, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - The bid tone on the JPY strengthened further due to risk aversion Europe, pushing the USD/JPY pair to a fresh session low of 117.27 levels.

    Safe havens rise

    JPY and other traditional safe haven assets- CHF, Gold and Treasuries - extended gains as the major European stock markets fell in early session. The risk aversion in Asia and the 3.5% drop in Chinese stocks appear to have hurt the investor sentiment in Europe.

    Moreover, the European desks ignored the positive closing on Wall Street yesterday. At the time of writing, the pair was on a recovery mode; trading around 117.40 levels. Later in the day, the pair could be influenced by the US advance retail sales data and sentiment on Wall Street.

    USD/JPY Technical Levels

    The immediate support is seen at 117.20 (Jan 8 low), under which the pair could drop to 116.69 (Jan 11 low). On the other hand, a resistance is seen at 117.80 (hourly 100-MA) and 118.02 (hourly 200-MA) above which the pair could target 118.82 (Jan 8 high).
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